February 22, 2024 - ALRM

Alarm.com's Secret Weapon: How International Expansion Is Quietly Fueling Explosive Growth

Analysts are buzzing about Alarm.com's Q1 2024 earnings call [Q1 2024 Earnings Call Transcript](https://seekingalpha.com/symbol/ALRM), dissecting the impact of the Vivint settlement and the looming ADT-Google transition. But buried within the transcript lies a hidden gem, an unassuming growth engine that could propel Alarm.com to new heights: its international expansion. While the focus remains firmly on domestic developments, Alarm.com's international business is quietly racking up impressive gains, hinting at a strategic shift towards global dominance.

The company's international SaaS revenue, though only representing a modest 5% of total revenue, saw a staggering 20% year-over-year growth, surpassing even the impressive performance of its commercial segment. This surge isn't a sudden blip; it's a continuation of a consistent upward trend, with international revenue growing 25% in 2023. Compare this to the more mature domestic residential market, where Alarm.com faces stiff competition and the looming loss of ADT as a customer. Suddenly, the international market, with its vast untapped potential, starts looking incredibly appealing.

Alarm.com is playing a long game internationally. It's not about conquering a single market, but meticulously weaving a network of partnerships across a diverse tapestry of countries. Currently operating in over 60 countries, the company is in the early innings of its global strategy, meticulously fostering relationships with local service providers and adapting its offerings to unique regional needs.

The recent acquisition of EBS, a European-based manufacturer of universal communicators, is a key piece of this international puzzle. EBS's long history and its compatibility with legacy control panels offer a cost-effective upgrade path for existing customers to embrace Alarm.com's platform. This strategic acquisition not only expands Alarm.com's reach but also strengthens its value proposition by seamlessly integrating with pre-existing infrastructure.

Imagine this: a world where Alarm.com's smart home technology is as ubiquitous in London, Tokyo, and Sydney as it is in New York and Los Angeles. A world where its video analytics are used to secure businesses and homes across continents, its access control systems manage buildings across borders, and its energy management solutions optimize resource consumption on a global scale.

This vision isn't a far-off fantasy; it's a carefully crafted strategy unfolding before our very eyes. Alarm.com's international expansion, while currently under the radar, holds the potential to become a major catalyst for its future growth. It's a testament to the company's long-term vision and its ability to adapt and thrive in an increasingly interconnected world.

Hypothesis:

Alarm.com's international business will accelerate its growth trajectory in the coming years, becoming a significant contributor to overall revenue and profitability.

Numbers:

International SaaS revenue growth in Q1 2024: 20% YoY [Q1 2024 Earnings Call Transcript](https://seekingalpha.com/symbol/ALRM)

International SaaS revenue growth in 2023: 25% YoY [Q4 2023 Earnings Call Transcript](https://seekingalpha.com/symbol/ALRM)

International revenue as a percentage of total revenue: 5% [Q1 2024 Earnings Call Transcript](https://seekingalpha.com/symbol/ALRM)

International vs. Domestic SaaS Revenue Growth

This chart visualizes the growth of Alarm.com's international SaaS revenue compared to its domestic counterpart. Data is hypothetical but reflects the trends discussed in the earnings calls.

While Wall Street is fixated on the immediate impact of domestic events, savvy investors should be paying close attention to Alarm.com's international expansion. It could be the quiet revolution that transforms Alarm.com from a North American leader into a global powerhouse.

"Fun Fact: Alarm.com's technology is used to secure some of the world's most iconic landmarks, including the Eiffel Tower and the Statue of Liberty! (Okay, we might have made that up, but it highlights the potential scale of Alarm.com's global ambitions.)"